(News Bulletin 247) – The European Central Bank (ECB), still keen to control inflation, raised its key rates again on Thursday and hinted that further hikes were to come despite current health concerns. of the global financial system.
As expected, the ECB decided to raise its three interest rates by 50 basis points, in line with its determination to ensure that inflation returns to the medium-term target of 2% as soon as possible.
The interest rates for the main refinancing operations, the marginal lending facility and the deposit facility are thus raised to 3.50%, 3.75% and 3% respectively.
In its press release, the Governing Council indicates that it is carefully monitoring the current tensions in the markets, while judging that the banking sector in the euro zone is ‘resilient’.
The ECB recalls that it has revised its growth projections for the euro zone upwards due to the decline in energy prices and the economy’s better resilience to a difficult international environment.
But the institution also believes that inflation should ‘stay too high for too long’.
According to its economists, price increases should average 5.3% in 2023, 2.9% in 2024 and 2.1% in 2025.
Regarding its asset purchases, the asset purchase program (APP) will be reduced at a measured pace of around 15 billion euros per month on average until the end of June 2023, then its pace will be adjusted over time.
Regarding the Pandemic Emergency Purchase Program (PEPP), the Governing Council intends to reinvest the principal repayments of maturing securities acquired under the program until at least the end of 2024.
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